July 31, 2014

We reported on July 8 that "Samsung Profits Plummet 24% on Slow Smartphone Sales." The numbers were based on preliminary estimates of what was to be announced later in the month. A report that we posted yesterday presented Samsung's decline in smartphone market share in Q2. Today, Samsung's official Q2 financial results were announced in Korea and it was actually worse than expected. Samsung said its net profit fell for the first time in nearly three years in the second quarter on weaker-than-expected smartphone sales.

More specifically, "Operating profit at Samsung's mobile division--its biggest profit generator--fell 30% as the company faced more competition from Apple and a flurry of low-cost Android phone makers."

Samsung further noted the second half "will remain a challenge", as profitability in its mobile unit may suffer due to a heated race over price and products.

A Korean report published today noted that in an effort to provide analysts with some hope for their mobile division, industry watchers said "Samsung is set to release a new type of smartphone in the third quarter to recoup prior losses from the April-June period. The device is anticipated to be set apart from the Galaxy S or Galaxy Note lineup."

Another report published today noted that a new smartphone this fall will be built using "new materials", according to Kim Hyun-joon, a senior vice president at Samsung's mobile communications business during an earnings call. He declined to go into details.

Many of Samsung's patent filings have been focused on multi-display smartphones. Whether the timing is right for such a product is unknown at this time.

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